There are many moving parts to McCain’s budget policy (see McCain site on the economy, [0]), so I can only undertake a partial analysis. That being said, extension of JGTRRA and EGTRRA is the most concrete, and easy to score, component, exactly because the CBO has already done it.
Figure 1 depicts the impact of making permanent the Bush tax cuts of 2001 and 2003, relative to the March 2008 CBO baseline.
Barack Obama gave a fine speech at the Democratic National Convention on Thursday. But I’m troubled by what I see as its underlying economic philosophy.
The preliminary GDP release today provided a number of surprises. The first surprise was not that GDP was higher than the advance release (given the June trade figures reported earlier this month), but rather that at 3.3% it exceeded the 2.8% (SAAR) of the consensus [0]. The second surprise is that the reduction in imports comprises an even larger proportion of the overall growth.
“Is the first zone wide recession in the short history of the eurozone about to be registered?” asks Edward Hugh. I was curious to apply the algorithm for calculating my U.S. recession indicator index to a euro area GDP measure to get an answer.
Why is the trade deficit, even taking out oil, so large when the dollar is so weak? Maybe some insights can be gleaned from productivity measures.
Many people may not care whether our current situation meets the formal definition of a recession, but as I’ve explained previously, you should. Here’s a summary of how I see the economy at the moment. I begin by discussing a new paper by UCLA Professor Ed Leamer, which has also been highlighted by Greg Mankiw, Frank Stephenson, Calculated Risk, and Brian Blackstone.
Over the past few months, I’ve heard that, while job creation is insufficient to keep unemployment rates constant, job losses have not been consistent with recession. More recently, we’ve heard a slight modification on this “talking point”. Commenting on the August 1 labor market release, WSJ RealTime Economics notes:
So far this year, the economy has shed nearly half a million jobs — hardly a sign of strength.
But it could have been much worse. In testimony before a congressional panel Friday, Bureau of Labor Statistics Commissioner Keith Hall noted that the last two recessions had resulted in 1.5 million lost jobs. “Economic growth is not strong enough to support job growth,” he told legislators, but he added that relative to the last set of official recessions, job losses this time around “have not been as severe.”
I normally leave it to folks like Dean Baker to beat up on the press. But I can’t resist shining a bright light on today’s story about oil speculators in the Washington Post, which has also been discussed by Mark Thoma and Tyler Cowen.
What to make of the different measures of inflation being faced by consumers?
I’ve maintained that rising oil prices put a significant burden on the U.S. economy in recent months. How much will falling oil prices help to alleviate those concerns?